Working For Perot: Strict Conduct Code -- Plaintiffs Cite Inflexibility When He Ran Data Company

DALLAS - By all accounts, Reginald Dallaire was a model employee. Still, Electronic Data Systems fired him in 1983 for wearing a beard, even though he had converted to Orthodox Judaism and shaving was against his religion.

Although company founder Ross Perot was not personally involved in the case, he favored an EDS dress code that included the no-beard policy. A federal judge ordered Dallaire reinstated to his EDS job in Seattle; he quit shortly thereafter.

"The thing that struck me at the time was they were very much a company that had policies and they felt that if they had policies that were right, they didn't want to compromise," said Michael Reiss, at the time the regional attorney for the Equal Employment Opportunity Commission who handled Dallaire's case. The EEOC brought the suit against EDS on Dallaire's behalf.

A survey of more than 100 lawsuits filed in courts nationwide show what Perot critics say is a pattern of inflexibility on some EDS policies among lower-level employees.

Perot, a likely independent presidential candidate, did not respond to a request for an interview.

Close associates who were involved with Perot in developing the dress code and other employment practices said it was not meant to discriminate, but to enhance marketing.

"You don't walk in wearing sandals and shorts and talk to a chairman of the board," said Mitch Hart, one of EDS' three founding employees.

"Ross called it corporate camouflage," said Tom Meurer, Perot's personal assistant for seven years and now an executive with Hunt Oil.

Perot sold EDS to General Motors in 1984 after building the small data-processing firm he started in 1962 into an international conglomerate.

From the start, his associates said, there was a dress code: white shirts, dark suits, lace-up shoes, short hair and no facial hair. Current EDS management said it is less stringent today.

Among the allegations leveled in lawsuits checked by the Dallas Morning News:

-- EDS fired a Dallas man for talking about his salary with a co-worker, then sued him for $9,000 to recoup the cost of training him.

-- EDS fired a recruiter in Detroit because she refused to follow orders not to hire "people with weak handshakes," because they were probably gay.

The first suit was settled out of court. The second, which was filed after Perot sold EDS to General Motors in 1984, is being contested by EDS.

The men who have worked with Perot most closely dispute such allegations.

One example they cite: When an executive worked marathon hours at EDS in the 1960s, Perot would send a gift from Neiman Marcus to the neglected wife at home with a thank-you card.

But the lawsuits indicate that Perot's management policies angered at least some rank-and-file EDS employees.

"I don't think he's really someone who understands the intricacies that a democracy requires, that you have to allow for a lot of peoples' lifestyles and ideas," said Leonard Kirzner, a Dallas lawyer who represented a former EDS employee in a dispute with the company.

"If you abide by his rules, then you will do well. But we don't live in a country where you have to abide by the rules the chief executive sets down. I'm a little bit frightened of having him be president, to be honest with you," Kirzner said.

However, Meurer, Mitch Hart and Tom Marquez, three men who have worked closely for and with Perot and have known him for about 30 years, think Kirzner couldn't be more wrong.

"I've got to emphasize again, we never tried to impose anything on anybody," said Marquez, one of the three men, led by Perot, who founded EDS in 1962.

"We covered in great detail what our philosophies were, what our policies were before people came with the company. . . . If they didn't like anything, they didn't have to join," Marquez said.

Marquez says marital infidelity - regardless of whether it involved a co-worker - was cause for firing. "We used to feel very strongly that if a person's wife or children can't trust him, how in the heck can we?" Marquez said.

Employees also were fired for talking about their salary. Hart said it was his idea, endorsed by Perot, and it was critical to ensure that people could be paid based on performance alone.

Gays and lesbians? "It just never came up," said Marquez.

"It was not one of these very rigid - you will do this, you will do that - type of thing," said Hart.

"It was much more of - to find people that have common ideals, common philosophies about how to do business, the way you treat a customer and the way you treat employees, and going from there."

Among the employment policies at EDS that the Dallas Morning News culled from lawsuit filings and interviews:

-- Between 1970 and 1988, EDS sued more than 120 former employees in state and county court in Dallas to recover $9,000 from each because they had signed a note saying they would not resign or be fired before working for EDS for two years.

-- Glenn Graves, an employee who signed the note in 1981, said in court pleadings he worked "slave-like hours" of 70 hours a week for 15 months, with Christmas vacation suspended, while the threat of the note hung over his head. When he quit, EDS sued him for $9,000. A Dallas judge ordered him to pay the note, plus interest and EDS' attorney fees.

-- Alfred R. Clark Jr. was fired in 1982 for discussing his sister's salary with a fellow employee, who reported it to supervisors. EDS sued him to recover $9,000 - the cost they estimated for a six-week technical training class. The case was settled out of court.

EDS spokesman Tony Good said EDS no longer fires for infidelity or discussing salary. The dress code is less stringent.

In some states, when an employee leaves or is fired, EDS still tries to recoup about $9,000 for a training program it says costs $100,000. The Michigan attorney general ruled the practice illegal in that state in 1990.

When it came to Dallaire's beard, according to the lawsuit, EDS officials did not believe that religious conviction kept him from shaving.

But the judge granted Dallaire's temporary injunction and said he should be reinstated before the case went to trial. "There was not the slightest hint of any other reason for termination," wrote Judge D.J. Coughenour.

"Nor is this a case of an employee who engages in a newly created, imaginative form of religion. It was uncontroverted that Dallaire is a converted Jew."

The case never went to trial. EDS did not back down after the injunction, Reiss said, and Dallaire never went back to work, where managers considered him "a security risk" because he had sued EDS.